Paysign, Inc. (PAYS) DCF Valuation & Fundamental Primer
Paysign, Inc. (PAYS) trades at $5.85 with a market enterprise value of $189.6M and generated $100.6M in TTM revenue and $73.5M in free cash flow (filed 2026-08-06 (period ended 2026-06-30)). Our 5-year DCF model estimates an implied intrinsic value of $48.84 per diluted share ($2.85B DCF enterprise value, Grade: A · 76/100 · High-Quality Compounder).
SEC 10-K/10-Q DCF teardown of Paysign, Inc. (PAYS): $100.6M TTM revenue (29.2% growth), 61.0% GAAP gross margin, 73.0% FCF margin, 5.1% SBC/revenue, and Rule of 40 score of 102.2%.
Paysign, Inc. (PAYS) earns a "Buy" rating and an institutional Quality Score of 76/100 (Grade A). On $100.6M in baseline revenue (29.2% growth, 61.0% gross margin, 73.0% FCF margin), our 5-year DCF yields an Enterprise Value of $2.85B ($48.84/share vs. $5.85 market price). On the R&D Return Benchmark, PAYS ranks #1 of 174 (Harvesters · Grade AAA, 17907123.61× return).
Gross Margin & Unit Economics: Paysign, Inc. operates at a 61.0% gross margin on $100.6M revenue (11.4 pts below the Software - Infrastructure median of 72.4%).
R&D Productivity (Harvesters · Grade AAA): Investing 0.0% of revenue in R&D ($0) generates $17907123.61 of incremental gross profit per R&D dollar (Rank #1 of 174).
Rule of 40 & Cash Conversion: Combining 29.2% top-line growth with 73.0% FCF margin yields a 102.2% Rule of 40 score (vs. 38.4% cohort median) and $2.85B DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (61.0% Gross Margin · 29.2% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $100.6M | $130.0M | $167.9M |
| Cost of Revenue (COGS) | ($39.3M) | ($50.1M) | ($63.8M) |
| Gross Profit & Margin | $61.4M (61.0%) | $79.9M (61.5%) | $104.1M (62.0%) |
| Research & Development (R&D) | $0 | $6.2M | $7.7M |
| Sales & Marketing (S&M) | $31.9M | $39.5M | $48.9M |
| General & Administrative (G&A) | $12.4M | $15.4M | $19.0M |
| Operating EBIT | $17.1M (17.0%) | $18.8M (14.5%) | $28.4M (16.9%) |
| Adjusted EBITDA | $26.5M (26.3%) | $30.9M (23.8%) | $44.1M (26.2%) |
3 Key Underwriting Risks
Structural sensitivities monitored in the 3-Statement Financial Engine
Value-Creation Levers · Quantified Statement Impact
Apply any lever below to write its operating assumptions directly into the 3-Statement Model
Automate cloud hosting & support workflows to lift gross margin from 61.0% to 66.0%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $2.0M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $175.8M.
Paysign, Inc. (PAYS) 3-Scenario DCF Valuation Range
Stress-test PAYS's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Simulate how deploying Gemini workflow automation and autonomous engineering expands PAYS's Gross Margin, FCF Margin, DCF share price, and 2x2 R&D Return Quadrant.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $5.85).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $54.26 +828% | $57.64 +885% | $61.59 +953% | $66.26 +1033% | $71.86 +1128% |
| 9.3% | $48.78 +734% | $51.45 +779% | $54.51 +832% | $58.06 +893% | $62.23 +964% |
| 10.0% | $44.29 +657% | $46.43 +694% | $48.86 +735% | $51.64 +783% | $54.84 +837% |
| 10.8% | $40.53 +593% | $42.28 +623% | $44.25 +656% | $46.47 +694% | $48.99 +737% |
| 11.5% | $37.35 +538% | $38.80 +563% | $40.42 +591% | $42.22 +622% | $44.25 +656% |
Institutional Software Quality Scorecard (76/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Elite deferred revenue float; FCF exceeds operating income by >20%
Disciplined equity compensation well below software industry average
Sub-par gross margins; higher cost of delivery or hardware/services mix
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 430% of EBIT driven by upfront annual collections
- Net cash positive: $172.9M balance sheet buffer
Key Operational & Dilution Risks
- Lower software gross margins (61.0%), indicating higher hosting or service delivery drag
Compare Paysign, Inc. (PAYS) against the software universe on the 2x2 R&D Return vs. R&D Intensity matrix.
Reverse-DCF Solver: What Growth is Priced Into PAYS?
The current share price only requires -30.0% 5-year CAGR (-28.7% dilution-adjusted), well below historical growth of 29.2%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (5.1% of revenue) and annual share dilution (2.0%/yr). Accounting for both requires -28.7% 5-year revenue CAGR to justify $5.85/sh on a true per-share economic cash flow basis.
Paysign, Inc. (PAYS) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $100.6M | $100.6M | $130.0M | $167.9M | $216.9M | $280.2M | $361.9M |
| Gross Profit | $61.4M | $61.4M | $79.3M | $102.4M | $132.3M | $170.9M | $220.8M |
| Operating Income (EBIT) | $17.1M | $17.1M | $22.1M | $28.6M | $36.9M | $47.7M | $61.6M |
| Stock-Based Compensation (SBC) | $5.2M | $5.2M | $6.7M | $8.6M | $11.1M | $14.4M | $18.6M |
| Unlevered Free Cash Flow (FCF) | $73.5M | $73.5M | $95.0M | $122.6M | $158.4M | $204.6M | $264.3M |
| SBC-Adjusted True Cash Flow | $68.3M | $68.3M | $88.3M | $114.0M | $147.3M | $190.2M | $245.7M |
Software - Infrastructure Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 5.8 + 0.05 × (Rule of 40) · R² = 20%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Paysign, Inc. | PAYS | $362.6M | $100.6M | 61.0% | 73.0% | 102.2% | 5.1% | 1.9× |
| Block, Inc. | XYZ | $41.67B | $25.04B | 46.4% | 15.5% | 23.7% | 4.8% | 1.6× |
| CoreWeave, Inc. | CRWV | $35.80B | $1.92B | 74.2% | -80.0% | 0.0% | 1.6% | 23.5× |
| VeriSign, Inc. | VRSN | $22.52B | $1.56B | 87.7% | 56.1% | 61.5% | 3.9% | 15.5× |
| CORPAY, INC. | CPAY | $22.17B | $3.97B | 78.1% | 44.4% | 52.1% | 2.9% | 7.2× |
| NetApp, Inc. | NTAP | $21.02B | $7.39B | 70.6% | 22.3% | 24.6% | 5.4% | 3.0× |
| Joint Stock Co Kaspi.kz | KSPI | $11,481.85B | $2,520.93B | 62.3% | 19.3% | 59.8% | — | 4.4× |
| Peer Cohort Median Benchmark (N=6) | 72.4% | 20.8% | 38.4% | 3.9% | 5.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 1.9× | $189.6M | $362.6M | $5.85 | 0.0% |
| -20% Multiple Compression | 1.5× | $151.7M | $324.6M | $5.24 | -20.0% |
| -35% Multiple Compression | 1.2× | $123.3M | $296.2M | $4.78 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $503.2M | $676.1M | $10.91 | +165.4% |
Frequently Asked Questions: Paysign, Inc. (PAYS) Valuation
What is Paysign, Inc. (PAYS)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Paysign, Inc. (PAYS) has a Base Case implied value of $48.84 per share (with a Bear Case of $19.72 and a Bull Case of $93.84), compared to its current price of $5.85. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Paysign, Inc. (PAYS)'s Rule of 40 score and Free Cash Flow margin?
Paysign, Inc. achieves a Rule of 40 score of 102.2%, combining a 29.2% revenue growth run-rate with a 73.0% TTM free cash flow margin on $100.6M in trailing twelve-month revenue. In the Software - Infrastructure peer cohort, the median Rule of 40 benchmark is 38.4%.
What revenue growth rate is priced into PAYS stock according to Reverse-DCF analysis?
At $5.85 per share (Enterprise Value of $189.6M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of -30.0%, compared to Paysign, Inc.'s historical CAGR of 29.2%. Overall market expectations are rated as "Substantial Margin of Safety".
What is Paysign, Inc. (PAYS)'s R&D Return Score and innovation productivity?
Paysign, Inc. (PAYS) recorded N/A in FY R&D expense (tracked from SEC filings) and $48.7M in FY gross profit. It is currently unranked on the letter-grade leaderboard (pending full multi-year XBRL R&D history).
How does Paysign, Inc. compare to Software - Infrastructure peers?
Paysign, Inc. (PAYS) earns an institutional Software Quality Score of 76/100 (Grade A — High-Quality Compounder). Across its Software - Infrastructure peer group (XYZ, CRWV, VRSN, CPAY, NTAP), the cohort trades at a median EV/TTM Revenue multiple of 5.8× and a median gross margin of 72.4%.
How does Stock-Based Compensation (SBC) impact Paysign, Inc. (PAYS)'s valuation?
Paysign, Inc. recorded $5.2M in TTM stock-based compensation (5.1% of revenue). When treating SBC as a cash-equivalent compensation expense, Paysign, Inc.'s SBC-adjusted free cash flow yield is 18.9%, scoring 21/25 on our Shareholder Dilution Friction pillar.